Choosing suppliers for your business

The right suppliers provide the most suitable goods or services at the most suitable prices and in the right time frames for your specific business needs.

Finding suppliers

Online is the best way to locate suppliers such as manufacturers and wholesalers. They may also advertise in the Yellow Pages. Attending industry events and exhibitions is another good way to find suppliers and examine their products and services. You can also use your networks to find suppliers.

Key factors for choosing suppliers are outlined below. Once you have a list of potential suppliers, ask them for written quotations and, where appropriate, a sample of the items you need. You can then compare their services to see which suppliers are the best fit for your business.


If you are in a new business, a key consideration for choosing suppliers is affordability. If you are focused on managing your finances, competitively priced suppliers are an attractive option.

However, cheap does not always represent the best value for money. If the quality of your supplier's product or service is poor, you may incur extra costs for returns and replacements, and risk losing business with any delays that result. If you decide to pass poor quality on to your customers, you risk damaging your business reputation.

Learn more about starting a new business.


Reliability should be another key consideration for choosing suppliers. Reliable suppliers deliver the right goods or services on time, as described.

Large suppliers are generally reliable because they have enough resources and systems in place to make sure they can still deliver if anything goes wrong. However, you can often develop a closer relationship with small suppliers – especially if you are their main customer. In these cases your supplier may also respond better to different requests, such as rush orders or holding on to stock.

Learn more about stock control.


Look for experienced suppliers who have been in business a long time. Stability is important, especially if you are entering into a long-term contract with a supplier or they are the only supplier of a particular item you need for your business.

Exercise due diligence. Check the supplier's credit history to see if they are financially stable. It is worth finding out what businesses have used a particular supplier's services and asking them for a reference.


Think about location when choosing suppliers. Dealing with distant suppliers might mean longer delivery times and extra freight costs. If you need something quickly, a local supplier might be a better option. But be sure to investigate freight policies of distant suppliers. Bulk orders, for instance, might get you free shipping or you might be able to combine different orders to reduce costs.

Supplier groups

While using a single supplier has its advantages (e.g. you can develop a close business relationship that benefits both sides) it also has its risks. If your supplier goes out of business or cannot deliver, your business will suffer. It might be a better idea to use a carefully selected group of suppliers as insurance against any problems occurring.

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